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HomeMy WebLinkAbout98-539 DownsApril 2, 1998 Dear Ms. Downs: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL Judith A. Downs, Director Bureau of Community Planning and Development City Hall, 21 Seneca St. Oil City, PA 16301 98 -539 Re: Conflict, Public Official /Employee, Bureau of Community Planning and Development, Third Class City, Council- Manager Form of Government, Private Employment or Business, Contract, Housing Authority, Environmental Studies. This responds to your letter of February 26, 1998 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employe Ethics Law presents any prohibition or restrictions upon the director of a third class city's bureau of community planning and development with regard to contracting in her private capacity to provide environmental studies to a housing authority with which she has official dealings. Facts: As the Director of the Bureau of Community Planning and Development (Bureau) for the City of Oil City (Oil City), you seek an advisory from the State Ethics Commission. Oil City is a City of the Third Class and operates under the Optional Third Class City Charter Law (See, 53 P.S. §41 101 .) pursuant to the Council- Manager plan of government. Your Bureau was created pursuant to an Administrative Code, which Oil City adopted by ordinance. You have enclosed a copy of Section 5 -20 of the Administrative Code which sets forth the duties of your Bureau. You note that Section 5- 20C(4) of the Administrative Code provides that the Bureau is to cooperate and work with various authorities and commissions, including the Oil City Housing Authority (Housing Authority). The Housing Authority is a separate government entity and operates according to state laws pertaining to such authorities. You state that you routinely work with the Oil City Housing Authority in your capacity as Director of the Bureau. Pursuant to the federal National Environmental Protection Act (NEPA), the Housing Authority is required to conduct environmental studies of proposed projects. However, the Housing Authority has no in -house capability to conduct these environmental studies. The Housing Authority is proposing that you provide such services for a fee. It would appear that under the proposed arrangement, you would Downs, 98 -539 April 2, 1998 Page 2 be contracting directly with the Housing Authority, although the facts which you have submitted are somewhat unclear in this regard. You ask whether your entering into such a service and professional contract with the Housing Authority would present a conflict for you under the Ethics Law. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. § §407(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 P.S. §§407(10), (1 1). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As the Director of the Bureau of Community Planning and Development of the City of Oil City (Oil City), you are a public official /public employee subject to the provisions of the Public Official and Employe Ethics Law ( "Ethics Law "). Section 3(a) of the Ethics Law provides: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined in the Ethics Law as follows: Section 2. Definitions. "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. Section 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities Downs, 98 -539 April 2, 1998 Page 3 (j) Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest, as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest, and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. In each instance of a conflict, Section 3(j) requires the public official /employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In applying the above provisions of the Ethics Law to the facts which you have submitted, Section 3(a) of the Ethics Law would not prohibit you as a public official /public employee from having outside business activities or employment. However, as a public official /public employee, you would be prohibited from using the authority of your public position — or confidential information obtained by being in that position — for the advancement of your own private pecuniary benefit. Pancoe, Opinion 89 -01 1. Examples of conduct that would be prohibited under Section 3(a) would include: (1) the pursuit of a private business opportunity while acting in a public capacity, Metrick, Order No. 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order No. 800; Pancoe, supra; and (3) the review in your public capacity of work which you performed in your private capacity. Ferrero, Order No. 720; Miller, Opinion No. 89 -024. Additionally, if you would enter into the proposed contract to provide compensated services to the Housing Authority, you would have a conflict of interest in your official capacity as the Director of the Bureau in matters which would financially impact upon the Housing Authority. This decision is based upon the following analysis. Although the Housing Authority, as a governmental body, would not be a "business" with which you would be associated, it would be in a position to affect you financially. In similar situations, the State Ethics Commission has held that such reciprocal arrangements present a conflict of interest for the public official /public Downs, 98 -539 April 2, 1998 Page 4 employee when matters come before him in his official capacity which would financially impact the other party to such an arrangement. In Bassi, Opinion No. 86- 007 -R, the State Ethics Commission held, inter alia, that a County Commissioner (Edward Paluso) could not enter into a lease with a municipal authority, where one of the members of the authority (Norman Carson) was a county employee directly responsible to the commissioners of the county, unless the execution of the lease was accomplished after an open and public process, with the authority member abstaining from participating in the review and award of said lease, and the county commissioner abstaining from participating in any matter relating to the authority member in his position as a county employee. The Commission stated, inter ... we cannot ignore the fact that Mr. Carson is an authority member and has influence and control over authority decisions. In this respect, Mr. Carson, by voting on the final adoption of a lease, would be voting on a matter directly related to his employer. Even though that employer is another governmental body, we have held, in the past, that a public official may not vote or participate in a matter if it somehow relates to a financial interest which he may have. See, WeIz, 86 -001. In the instant situation, Mr. Carson would be called upon to determine the advisability of renting property for the authority. The property which they are seeking to rent is owned by the individual or one of the individuals who currently supervises him and controls his public employment with the county. As a result of this, Mr. Carson, as an authority member, should abstain from participating in any matter relating to this particular lease. See, Bassi, 86 -007 at 3. The Commission further stated: Mr. Paluso as a county commissioner, is, in part, responsible for the general supervision of Mr. Carson. Mr. Carson, on the other hand, is an authority member in a position to grant Mr. Paluso a lease which results in Mr. Paluso receiving a financial gain. It may be difficult for the public to perceive how Mr. Paluso's actions as a county official, would not somehow be influenced by this potential leasing arrangement. It may be argued that Mr. Paluso, in dealing with Mr. Carson, to date, has done so in order to effect the favorable outcome of this lease. Additionally, it could be argued that Mr. Carson voted in favor of the lease in order to advance his position as a full -time county employee. The above factual scenarios, while hypothetical in nature, nonetheless create the types of conflicts of interest that are to be addressed by this Commission. at 4. In Woodrinq, Opinion No. 90 -001, the State Ethics Commission reviewed a similar situation. Jesse Woodring, Chairman of the Sunbury Redevelopment Authority, had applied to the City for a rehabilitation grant through the Federal Rental Rehabilitation Program (hereinafter, the "Program "). Kenneth Pick, who was employed as the Executive Director of the Redevelopment Authority (chaired by Woodring) also served as the Community Development Coordinator for Sunbury. In the latter capacity, Pick was administrator in charge of the Program for the City. Pick's functions included administering the Program, reviewing all applications, and determining eligibility. The Commission stated: . we are concerned that Mr. Pick, who is an employee of the Redevelopment Authority of which you are Chairman, has the duty of Downs, 98 -539 April 2, 1998 Page 5 reviewing all applications and determining eligibility in his capacity as Community Development Coordinator for the city. In particular, the potential exists, given the employer - employee relationship between the Redevelopment Authority and Mr. Pick, that your application might be reviewed in a more favorable light than other applications. To forestall such a situation, you must not participate or take any action as to Mr. Pick if your application is approved and you receive benefits. Bassi, Opinion 86 -007. In addition, Section 3(j) of the Ethics Law would require you to publicly note that you would have a conflict as to any matter involving Mr. Pick. In addition, you must file a written memorandum to that effect with the person responsible for recording the minutes. Woodrinq, Opinion No. 90 -001 at 6. Under the facts which you have submitted, the Ethics Law would not preclude you from entering into a contract with the Housing Authority to provide environmental studies as an outside business activity, subject to the restrictions of Sections 3(a) and 3(j) of the Ethics Law set forth above. If you would contract with the. Housing Authority to provide such services for a fee, you would in your official capacity have a conflict of interest in matters which would financially impact upon the Housing Authority. In each instance of a conflict of interest, you would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j). The propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Law has not been considered in that they do not involve an interpretation of the Ethics Law. Specifically not addressed herein is the applicability of the Optional Third Class City Charter Law and /or the Administrative Code of Oil City. Conclusion: As Director of the Bureau of Community Planning and Development (Bureau) for the City of Oil City (Oil City), you are a public official /public employee subject to the provisions of the Ethics Law. Subject to the restrictions of Sections 3(a) and 3(j) of the Ethics Law set forth above, the Ethics Law would not preclude you from entering into a contract with the Oil City Housing Authority (Housing Authority), which is a separate government entity from the City, to provide environmental studies as an outside business activity. If you would contract with the Housing Authority to provide such services for a fee, you would in your official capacity as Director of the Bureau have a conflict of interest in matters before you which would financially impact upon the Housing Authority. In each instance of a conflict of interest, you would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j). Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(11), this Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. Downs, 98 -539 April 2, 1998 Page 6 This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code §13.2(h ). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 -787- 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. S)Q cerely, Vincent Dopko Chief Counsel